Kalanithi Maran seeks Rs 1,323 cr in damages, SpiceJet refutes claims

KAL Airways and its promoter Kalanithi Maran have decide to challenge an arbitral award requiring SpiceJet and Ajay Singh to refund Rs 579 crore plus interest to Maran

This report has been updated.

KAL Airways and its promoter, Kalanithi Maran, announced on Monday their intent to seek more than Rs 1,323 crore in damages from SpiceJet and its chief, Ajay Singh, while also challenging a recent Delhi High Court order in their ongoing legal dispute, reported news agency PTI. The following day, SpiceJet refuted the claims, stating that this was "a regurgitation of previously rejected claims by the Arbitral Tribunal and then the Delhi High Court," in an exchange filing.

SpiceJet clarified that KAL Airways and Kalanithi Maran had initially sought damages exceeding Rs 1300 crore in the arbitration proceedings. This claim underwent thorough scrutiny and was subsequently dismissed by a panel consisting of three retired Supreme Court judges.

Subsequently, KAL Airways and Kalanithi Maran appealed to the Single-Judge Bench of the Delhi High Court, persisting in their pursuit of the same amount in damages, only to face rejection once more.

On May 17, 2024, the Division Bench of the Delhi High Court ruled in favour of SpiceJet and Ajay Singh. With this, SpiceJet is now proceeding to seek a refund of Rs 450 crore.

The division bench had also upheld an arbitral award requiring SpiceJet and Ajay Singh to refund Rs 579 crore plus interest to Maran. The bench allowed the appeals filed by Singh and SpiceJet, challenging the single judge’s order from July 31, 2023, and remanded the matter back to the lower court for reconsideration of the petitions challenging the arbitral award.

Following this development, Maran and KAL Airways decided, after consulting with their legal counsel, to challenge the ruling. The decree holders believe the judgement is “deeply flawed and warrants further scrutiny.”

A protracted legal battle

By pursuing both the challenge to the Delhi High Court judgement and the claim for damages, Maran and KAL Airways aim to achieve a just resolution to the protracted dispute, which they assert has caused significant hardship for over a decade. The statement added that they would also pursue the execution of the arbitral award, seeking a refund of pending dues amounting to Rs 353.50 crore.

This action aligns with the Supreme Court’s orders dated February 13, 2023, and July 7, 2023, directing that the award in favour of the decree holders be executed in its entirety.

Meanwhile, SpiceJet has responded to the Delhi High Court ruling by stating its intention to seek a refund of Rs 450 crore out of the total Rs 730 crore paid to Maran and KAL Airways.
 

SpiceJet’s dispute with Kalanithi Maran

The dispute traces back to early 2015, when Ajay Singh, who had previously owned SpiceJet, reacquired the airline from Maran after it was grounded due to financial difficulties. As part of the acquisition agreement, Maran and KAL Airways claimed to have paid SpiceJet Rs 679 crore for issuing warrants and preference shares. However, in 2017, Maran approached the Delhi High Court, alleging that SpiceJet had neither issued the convertible warrants and preference shares nor returned the money.